Thursday, May 8, 2014

China Stocks May See Support On Thursday

BEIJING (dpa-AFX) - The China stock market on Wednesday snapped the four-day winning streak in which it had gained more than 25 points or 1.2 percent. The Shanghai Composite Index finished just above the 2,010-point plateau, but the market may see a positive bounce on Thursday.

The global forecast for the mostly oversold Asian markets is positive, with bargain hunting likely on optimism from Ukraine and comments from Fed Chair Janet Yellen - although technology stocks may continue to weigh. The European and U.S. markets were mixed to higher, and the Asian markets figure to follow that lead.

The SCI finished modestly lower on Wednesday following weakness from the health care, pharmaceutical and beverage stocks.

For the day, the index dropped 17.95 points or 0.89 percent to finish at 2,010.08 after trading between 2,008.45 and 2,024.63. The Shenzhen Composite Index dropped 1.6 percent to end at 1,027.99.

Among the actives, Hengkang Medical Group plummeted 8.4 percent, while Kangmei Pharmaceutical dropped 1.2 percent, Inner Mongolia Yili Industrial Group tumbled 3.2 percent, Sichuan Gaojin Food lost 4.5 percent and China Railway Construction Corp spiked 2.7 percent.

The lead from Wall Street is mixed, with the tech-heavy NASDAQ closing in the red while the rest of the markets ticked higher.

The NASDAQ climbed off its worst levels but still was down 13.09 points or 0.3 percent at 4,067.67. The Dow jumped 117.52 points or 0.7 percent to 16,518.54 and the S&P 500 climbed 10.49 points or 0.6 percent to 1,878.21.

Groupon (GRPN) posted a particularly steep loss on the day, with the daily deal website plunging 20.7 percent after forecasting second quarter earnings below estimates.

On the other hand, buying interest was generated by claims by Russian President Vladimir Putin that all Russian troops deployed along the border with Ukraine have withdrawn. Putin also urged pro-Russian separatists in southeastern Ukraine to postpone a May 11 referendum on autonomy.

Traders also kept an eye on Yellen's congressional testimony, which stated that a high degree of monetary accommodation remains warranted in light of the considerable degree of slack that remains in labor markets.

On the economic front, the Labor Department reported that U.S. labor productivity fell by more than anticipated in the first quarter of 2014.

Later today, China will release April figures for imports, exports and trade balance. Imports are expected to fall 2.3 percent on year after dropping 11.3 percent in March. Exports are called lower by 1.7 percent following the 6.6 percent decline in the previous month. The trade balance is tipped to show a surplus of $13.9 billion, up from $7.7 billion a month earlier.

Copyright RTT News/dpa-AFX

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